10 South 5th St., Suite 650 | Minneapolis, MN 55402
One of the biggest challenges small businesses face is how to provide health benefits that are attractive and meaningful to employees, but also feasible and sustainable for the company.
Owners and managers of small businesses are quickly realizing that employer-sponsored group insurance no longer makes sense for their company. Fortunately, changes in healthcare law have created a new and better alternative to group-based insurance — the individual market.
Over the past couple of years, hundreds of employers in Minnesota have opted to terminate their expensive group plans and send their employees to the individual market. The individual market is not only cheaper than the group market, but it’s better for employees. It offers more choices, eliminates the need for COBRA when an employee leaves since plans are portable, and for qualified individuals, provides access to government tax credits that can offset part or all of the cost of insurance.
But many employers are unsure how to take advantage of the individual market in a way that benefits their employees. Below are “The 3 Cs” to keep in mind when moving employees to the individual market:
- Customer Service: Health insurance is complicated, emotional and, for many people, quite scary. When employers transition to the individual market, they should work with an intermediary with a high-level of customer service. This intermediary should not only help your employees make sense of all the different options available, but also be there year-round to answer questions related to your employees' health insurance.
- Choice: One of the most attractive things about the individual market is the choices available. When employers work with a vendor to help their employees in the individual market, the vendor should have access to all the plans available in the market and shouldn't be incentivized to sell one plan over another. The vendor should also be certified by the state exchange so they can help eligible employees apply for and get tax credits. Employers should avoid companies that have a potential for bias when recommending plans to their employees.
- Compliance: The Department of Labor and the IRS have laid out several conditions under which it's legal for individuals to use employers' money to buy health insurance. It's important for employers to work with a vendor that has invested time and money to make thier program fully comliant with these rules.